Scott Picken, Wealth Migrate | Blockchain Unbound 2018

>> Announcer: Live from San Juan, Puerto Rico It's theCUBE, covering Block Chain Unbound, Brought to you by Blockchain Industries

>> Hello, everyone, welcome back to theCUBE's exclusive coverage in Puerto Rico for Block Chain Unbound It's a global event, people from all around the world, from South Africa, Miami, Russia, San Francisco, New York, all around the world, talking about Blockchain cryptocurrency, the decentralized internet, and the future of Money, that's the killer app in Blockchain and cryptocurrency I'm John Furrier, your host, my next guest is Scott Picken, who's the founder and CEO of Wealth Migrate Platform Scott, thanks for coming on >> Yeah, awesome John, thanks for having me

It's quite an exciting group of people here >> We met last night, had a great conversation, I really liked some of the things that we were talking about, I wanted to bring you on because being in South Africa, where you're living and working, you have a unique perspective because you see the global landscape So, I'm from Silicon Valley, we're here in Puerto Rico, America's got their view, the UK just announced a deal with Coinbase for essentially a license to convert funds into separate bank accounts through faster payment mechanisms, basically taking crypto and turning it into Fiat Kind of a game changer >> The one thing with the UK is they've been at the head of all of the different innovations over the last five to 10 years

They were right at the head in terms of crowdfunding and they're doing exactly the same in terms of now with the whole cryptospace And it's actually quite interesting because when you take into account Brexit, they actually really need to do it because they want funds coming into the country, they want to be seen as the future of the banking market, et cetera, so it's actually really exciting When you look around the world it's fascinating that I said this to you last night, that America really grew because Europe used to have all the controls And so the capital basically left Europe and were in America and now it's happening 300 years later as America has all the controls and the capital's starting to go elsewhere >> So America's turning into Europe

And so the potential is to bring, you don't have to say it, I'm an American and we're concerned about it Americans are concerned that we don't want to be that old guard, like Europe was to America in the America days So a new liberation's happening UK's putting a stake in the ground, saying, "We want to get our mojo back," my words >> Scott: sitting here in Puerto Rico

>> Yeah, they're in Puerto Rico They're going to put a stake in the ground saying, "We're going to give you tax breaks 'til 2036" This is a money flow game right now So you've been doing some pioneering work, what's your perspective, talk a little bit about some of the world dynamics that you see because, let's face it, this is the transfer of money, with crypto, it's happening at a massive scale, not just some underbelly boutique underground activities This is front and center, mainstream, real money, real commerce

Your thoughts? >> I would take it a step back, actually I think there's eight major macro trends that are all culminating at the same time So the first one is in the education space, and the whole of education is changing, and it's really becoming gamification, and it's becoming learning while doing So you don't learn and then go do something, you actually learn while you're doing it The second one, for me, is the whole Blockchain

And what that's enabling people is getting democratization to wealth and access to assets, whether they're in their country or global assets, basically The third thing that's really important is you've got the rise of the middle class You know, a lot of people talk about the unbanked three billion, but what they don't realize is that 12 billion people joined the middle class And they are primarily in the emerging world, they're in Africa, India, China

And what they want is, they want health, they want education, and they want access to wealth Then you take into account what's happening in terms of collaborative investing In the old days it was I do it on my own, you do it on your own, we sort of trust the financial industry Now we're coming together, it's the power of the crowd I could go on and on, that's just four of them, there's another four

They're all coming together and because this is happening is why we're seeing this metamorphosis and cryptocurrency is the catalyst on top of Blockchain that's allowing this to take place >> Talk about some of the things that you've been advocating for, I know you were sharing a private story, maybe this may or may not be the right time to talk about it, but you put forth some pretty forthright concepts in memos and letters to folks, and no one will publish it What are those views, because we've got the cameras rolling right now, share your vision >> Again, I fundamentally believe that technology can solve grand challenges And when you take our platform and what we're doing, we're effectively helping the 99% invest in commercial real estate like the top 1%

So what we were talking about last night was, I come from a country, South Africa, I was previously from Zimbabwe, and unfortunately for us is that in South Africa, they're talking now about taking away land without compensation So land redistribution without compensation Now, Einstein says that if you want to solve a problem, you can't solve it with the same reality that created the problem And so I wrote a letter to the President, an open letter two weeks ago, and I said, listen Why don't we do it differently? You're giving a person a piece of land in the middle of nowhere when they've never been a farmer will not help them get wealthy, I guarantee it

And if I'm wrong, let's go look at Zimbabwe Which is a economic disaster What about if we give them access to ownership of a good quality commercial asset that's earning a passive income? That is how you'll grow your wealth And then add to that, Cape Town nearly became the first city, and it still could be the first city, that literally runs out of water So why don't you go build a decent ionization plant in Cape Town with government money, allow people that you would give land to actually access to that asset and allow them to have the ownership? And that's sort of the concept, where you just think about it completely different

And you allow technology to actually give people what they want, which is wealth and prosperity for their family, and not just a farm in the middle of nowhere >> And you're really addressing, I think, the incentive system combined with structural change You talk about gamification earlier, this is kind of the dynamic How important from an education standpoint, meaning educating stakeholders, old guard or existing governments, because you have this organic groundswell coming up of young people, people with vision that are older and more experienced like us, what's the formula, how do you get this ball rolling? >> So it's quite interesting, I get asked this question all the time and for us, in the first world, a lot of what we're talking about is it nice to have? It's sort of a bit of a game and if I can participate, but where I come from in the emerging world, it's a necessity There are no other solutions

So if you live in South Africa or China or India and you want to get your money into a first world country like England, Australia, or America, it's very very difficult and virtually no one can do it But it's a major problem, because you want world preservation, you want your Plan B, you want your children to be able to go to a first world university, et cetera, et cetera, et cetera And so to answer your question, I think the way it will get solved is in communities where it's not a nice to have, it's a necessity In terms of educating the old guard, I believe that what happens is you get groundswell, like literally when people really need a solution solved, they persuade governments and regulators to change and it's interesting, coming back to how we started the conversation, that's why smaller countries are often the ones to adopt the regulated new change and, more importantly, countries in emerging markets, whereas first world countries are trying to protect what they have and, unfortunately, the new world is about capital And its capital flows

>> It's a choice between playing offense or defense, really in my mind it's a sports metaphor, whatever sport you like you know We love the sports analogies But this is what UK's doing, they're playing offense And I think you're seeing other countries wanting to restructure themselves as digital nations because that's what the young people are expecting So with that in mind, you have a global fabric here at this event, and it's just a microcosm of what we're seeing, which is outside the US, call it the little US bubble that we're living in, Silicon Valley, that's one case I'm wary of, but the growth outside the United States and even in Asia and south of the border, if you will, south of the equator, there's a ton of global action

What is, in your opinion, the few global things that are going on, that people should know about when it comes to how money's flowing and what they can do to take advantage of the trend rather than trying to hold it back What do we do, is it get into the current? Ride the wave? What should people understand about the new global dynamic? >> So the first thing I would say is, I always laugh at this, but people don't understand how much innovation's going on in China Like, go and understand WeChat to start off with It is phenomenal, what is happening The second thing for me is the global capital flows

When you consider how much capital is moving from the emerging world into the first world, primarily in real estate at the moment And that's just the top 1% of the top 1%, you know, that's the people with 10, a hundred million dollars But I've already said to you, there's 12 billion people coming into the emerging markets In the middle class, they're going to want the same things

And so those capital flows are going to be going cross border I also believe, with time, capital flows will be going from the first world into the emerging world in a safe way but wanting higher returns >> So then the emerging world, the US has a shrinking middle class, but yet the emerging world has a growing middle class That's going to attract new entrants >> Exactly

>> Okay >> Well, take into account China Has China had a big impact on the global economy in the last 20 years? Yes or no? >> Yes >> How many people are in the middle class in China? Plus or minus? >> Don't know >> I've heard different reports from 200 million to 400 million, but whether it's 200 or 400– >> It's more than it was 10 years ago

>> I know, but think about the impact that's had on the global economy I'm not saying that this is 12 billion in the next 10 years, it's either a factor of five to eight, depending on which way you want to look at it >> How much money, in your guesstimation, if you had to throw a dart at the board, order of magnitude, is flowing out of China with crypto into other assets? >> In the crypto space that's fascinating, because a lot of it is hard to tell, actually In real estate last year alone, it was just short of 30 billion dollars went into commercial real estate from China

Now what's interesting is that a lot of that money is sort of gray, like no one actually knows where it's coming from, which is why China tightened it up so much It's also why they tightened up the crypto side of things Because a lot of people want to get their money out of the country and into first world economies, and that's why, in the emerging world, cryptocurrencies have been embraced more, actually, than in the first world >> John: It's a faster way to move that money >> Coming back to necessity

So in South Africa, in Zimbabwe, in China you pay more for Bitcoin than you do in America or Europe I don't know if you know that >> John: No, I don't know that >> And by quite a lot Like in Zimbabwe you pay nearly double

So a lot of people are making money by overcharging coins They buy them in Europe, they sell them in South Africa, they sell them in Zimbabwe, they sell them in Nigeria >> So the demand to move the money out of country is very high >> Well, because they've got capital controls So they have currency controls

So you're only allowed to move a certain amount of capital out of the country legally So what happens now, you buy cryptocurrency and you can effectively invest in assets around the world And you literally started off this conversation, right in the beginning, there's a democratization in terms of capital flows and what's happening, and people are going to put their capital where they want to And governments, I believe, are not going to be able to control it by putting up controls, they're going to have to make their countries attractive so that the capital's flowing into the country, not out of the country >> So what's your take on big multinational corporations that have capital structures, have equity positions, and it could be also growing venture-backed or private equity-based companies, they have capital structures, they have equity investors, in some case public, and privates, and unicorn valleys or whatnot, now moving to look at utility tokens as a way to get to a global gamification

So you have multiple securities, a utility, and in some cases a security token a real security That seems to be a dynamic, are you seeing that on a global scale, are you seeing any activity there, we're seeing a little bit of movement around big companies trying to figure out how to play in crypto >> From my experience, not a huge amount I think that most people, they have a board, it's all around reputation, they got to meet the lawyers, the lawyers tell them, you're going to get crucified And so from my experience, not a huge amount, it tends to be the small to medium enterprises that are prepared to go out and look at it

However, I will say from our personal business perspective, we built our entire company on a community We've got shareholders all over the world and so for me, when it came to the crypto and the ICO market, that was just doing that more aggressively, effectively, and community-based companies are the future So whether you're a Fortune 500 company or a start up, it's all about building the community, and I believe that whether it's utility token or security or a combination of the two, it provides an incredible vehicle to ultimately be the catalyst to a community And if you're the catalyst to a community adding value, then you're going to build a company of value >> And capture that value

So, Scott, I got to ask you about Wealth Migrate Talk about your platform First of all, thank you for sharing your perspective here on theCUBE It's been fantastic to get that data out What's your company about? Take a minute to explain what you guys are doing, your value proposition, state of the company, are you doing an ICO, have you had an ICO, what's the status of the company? >> So from Wealth Migrate's perspective, the platform went live in October, 2013, so we're a little over four years in now

We've effectively got members from 111 countries around the world and we've raised just short of 70 million dollars All though the platform, all on Blockchain We've facilitated real estate deals of over 485 million dollars and what I'm proudest of, actually, is that we've got a higher than 70% reinvestment rate What we're doing is we're allowing the 99% to invest like the 1%, our minimum investment at the moment is $1,000, we're beta testing $100, and my dream is to get it to $1 You asked a little bit about the ICO

We built our platform on Blockchain not because of an ICO Our number one challenge was trust And ultimately Blockchain enabled us to solve the trust problem The second thing for us is that my dream is to get it to $1 per person per investment I want to solve the wealth gap

And I truly believe we can do it when we can allow anyone anywhere to invest in good quality assets I can't do it with the current system, there's too many friction costs With crypto and volume I can >> Whether it's semantics, or education and/or hurdle rate on dollars, it's an interesting concept You want to make the 99% invest like the 1%

Explain what that means, take a minute to explain that concept I mean, some people are like, "Okay, I know what "the 1% is, there was a movement about that" So now you're talking about something pretty radical and interesting What does that actually mean? I mean, empowering people to make more money? Unpack that concept >> So let me ask you a question

Do you personally own a medical building? >> Do I own what? >> A medical building >> No >> Like a hospital, medical building >> No >> So it's 2009, I'm in Bondi Beach, Sydney and I meet two US dollar billionaires

I had helped about two and a half thousand people buy houses and apartments in England, Australia, America, and South Africa And I sat with them and I said, "What are you investing in?" And they said, "Medical buildings" I said, "Why medical buildings?" And they said, "Well think about it "No matter what happens in the global economy, "people need doctors" I was like, that makes sense

Secondly, they said, "Doctors never move" I was like, that makes sense Thirdly, doctors are very good at being doctors, but they're not accountants And so they sign long term, good, favorable leases Now from a property perspective, real estate perspective, that's a no brainer

And I said to them, "How do I participate?" And they said it's really simple It's for friends and family, there's eight people only, it's five million Australian dollars each I was like, now there's the problem That company today is over 700 million dollars, it's on the Australian Stock Exchange, and it's what I call financial exclusion You and me don't own medical buildings

Since October 2013, we've enabled people to invest in medical buildings from $1,000 So the top 1% get wealthy by investing in better assets than the 99% >> John: Because they have access >> Because they've got access >> John: And the cash

>> And the cash But we've dropped the barriers to entry Because you and I can participate now from $1,000 and I will get it to $1 >> So it's a combination of leveraging the asset based securitization with that opportunity by using a crowdsourcing kind of model, is that what you're thinking? >> So, effectively, and I'd suggest– >> John: I'm oversimplifying it >> No, no, 100%, I'd suggest everyone goes and looks up the term collaborative investing which is ultimately, it's a thing that's been going on for decades by very wealthy people on how to successfully invest

We've taken that but we've added a smart component And why that's important is because in the past you needed 10, 50 million dollars to do collaborative investing, now you can do collaborative investing with $1,000 >> Yeah and what's beautiful is that you understand potentially whose reputation you're working with, you can move in herds, network effect kicks in, that's awesome >> What gives me the greatest pleasure, I mean, children, my son is six years old, he's already investing You know, most kids are playing Monopoly, he's playing real Monopoly, and so are adults

And what gives me the most pleasure and pride ever, and what I'm grateful for, is that we're changing people's lives >> People talk about how to solve the welfare system, all kinds of things, you make people own something, or try to own something or trade, whether they make money or lose money, you learn from it, you're better for it Here, you're providing a great service by opening the door, lowering the barriers to entry, to potentially wealth creation >> Dude, I call it freedom At the end of the day, if you're where you want to live, where you want to send your kids to school, how you want to retire, whether you want to donate to the church or whatever, I don't really care what you want, but I want you to have the freedom to be able to do it

And wealthy people get that freedom by investing in quality assets And we're just allowing them to do that now >> And the democratization is multiful, in this case you're creating a new economy model so the whole freedom, democracy aspect is in play >> Well, I mean if you think about it, when you get into $1 per person, $1 will not change your life But if you change your habits, you'll change your financial destiny

And so my philosophy is get it to $1, so that every single person can participate And once you start to learn good habits around money and wealth, the rest just, it's a formula >> It's a flywheel Kickstand Scott Picken, who's the founder and CEO of Wealth Migrate Platform from South Africa, formerly of Zimbabwe we learned today, great sharing the global perspective

Thanks for coming on theCUBE Exclusive coverage from Puerto Rico, this is theCUBE, I'm John Furrier getting the signal here out of all the noise in the market, this is what we do, this is theCUBE's mission, to bring you the best content, best story from the best people, more coverage here in Puerto Rico Day one of two days of coverage After this short break, thanks for watching

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